SteelMint: Indian pellet export index up further on limited offers

SteelMint's pellet export index (FoB east coast India) has increased further by $6/t w-o-w to $127/t on Wednesday (i.e 16th Sept).

Confirmed trades of last week - One export deal was concluded for China last week. The deal was concluded by Odisha based pellet makers at $136/t CFR China. However, this has not been considered under T1.

SteelMint has received around six indicative prices (T2) and out of that only four indicative prices have been taken into consideration for final price calculation as T2 inputs with an average price of $127/t. Notably, vessel freight to China has decreased to $12/t against $13/t a week ago, for a 55,000t vessel, SteelMint learned from sources.

Market overview - Chinese spot iron ore fines (Fe 62%) prices fell sharply today by around $4/t d-o-d to $124.3/t CFR as against at $128.55/t CFR China yesterday. Decline in iron ore futures on bearish steel market sentiments in China has resulted in drop in prices.

Pellet inventory at major Chinese ports has been increased around 0.3 mn t to 10.6 mn t last week against 10.6 mn t a week before as per Steelhome data.

SteelMint learned that many major India's pellet makers were not actively offering pellet in the export market. However, they are mostly exploring the domestic market as its still more lucrative than the export realization. Also, a couple of pellet makers were undergoing maintenance shutdown, hence less active in exports. Also amid heated discussions of pellet export duty, not all exporters/traders are ready to maintain stocks at ports.

South India-based pellet maker KIOCL has floated an e-tender for domestic sale of around 55,000 t for Fe 63% grade. The tender will be held between i.e. 16 to 17 Sept 2020 at 14:00 hrs IST (on both days) among empanelled customers.